I'll soon be updating my estate plan, and thought that while I do this I should at least investigate asset protection methods.

Other than an umbrella policy, what do people here do?

I'm thinking of protecting assets from creditors - specifically lawsuits. I don't have any special reason to be concerned, but it strikes me as a very small risk but with potentially large downside, especially since I'll be retiring soon and will quit adding to the nest egg.

There is no real asset protection. Are you a small business owner? No matter what, a good lawyer can pierce any shield you put up. I have tried this before, the only real way you can do this is by transferring all funds to off shore accounts that don't respond to US laws like ST.Kitts etc. Beyond that, if money or assets sit in US you can be assured you will loose. Don't waste money on lawyers. Its easy to break corporate shields, if you took even one penny out for personal use from corporate accounts you will loose in a lawsuit.

You can certainly protect your personal assets from business liability by using limited liability corporations. Again, something for which you need lawyers. Professional liability insurance for your work. Umbrella for everything else. In many states titling the house as tenants by the entirety protects it from the debts of either spouse alone. Depending on your state, retirement accounts, including IRAs may be protected. Same for life insurance policies. All depends on your state, so you need to review this with your attorney. Most who are expert in estate planning also will know their way these issues. However, some attorneys with broader practices may be prepared to do a simple will, but not to guide you through the rest. Depending on your situation, you may need an accountant as well

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jon-nyc wrote:Yes, that's in process. The question here was what others do, not what I should do.

Don't slander someone, no libel either. As much as you might like dogs - no german shepards, doberman, pitbull, husky, exotic wolve cross-breeds, no malamute. If you own firearms - keep them locked in a safe with a lock on the trigger, keep the ammo somewhere else.
Umbrella policy + liability insurance 2x in excess of assets. Fully fund tax-deferred retirement funds - draw from those last, hard to pierce the veil of retirement savings, much easier to access taxable/tax-free accounts.

ladfamily wrote:There is no real asset protection. Are you a small business owner? No matter what, a good lawyer can pierce any shield you put up. I have tried this before, the only real way you can do this is by transferring all funds to off shore accounts that don't respond to US laws like ST.Kitts etc. Beyond that, if money or assets sit in US you can be assured you will loose. Don't waste money on lawyers. Its easy to break corporate shields, if you took even one penny out for personal use from corporate accounts you will loose in a lawsuit.

Buy gold coins and diamonds, bury them in a safe location - good luck finding it and good luck taking it.

Other than umbrella policy the only concrete thing I will do is leave my megacorp 401k right where it is in retirement. Won't roll it over to an IRA where I understand it is far more exposed to lawsuits (I hope that's true).
The other thing I've thought a little about is moving away from where we currently live. Our freeways are heavily populated with high income executives whose survivors could justify massive claims. But probably the good weather here is going to trump that.
JW

JW Nearly Retired wrote:Other than umbrella policy the only concrete thing I will do is leave my megacorp 401k right where it is in retirement. Won't roll it over to an IRA where I understand it is far more exposed to lawsuits (I hope that's true).

My understanding is that this is not true. The protection has been extended to roll-over IRAs.

JW Nearly Retired wrote:Other than umbrella policy the only concrete thing I will do is leave my megacorp 401k right where it is in retirement. Won't roll it over to an IRA where I understand it is far more exposed to lawsuits (I hope that's true).

My understanding is that this is not true. The protection has been extended to roll-over IRAs.

My recollection is the asset protection part isn't really extended to them for the size 401k I have, but I can't recall my source for that. Do you have a source?
JW

My impression is that protection of rollover IRAs with funds from qualifed funds is unlimited. However that protection
(from some "recent" bankruptcy protection act) where you have to file successfully for bankruptcy is fundamentally different than the protection under ERISA which protects the qualified plan (except for IRS, QDRO, and perhaps something else) even if not in bankruptcy. State laws also are a factor with some being stronger than others.....you'd have to ask the same question about when they apply.